Realistic returns expectations of successful day trading

I do not think you need to think in percentage returns on capital if you are going to daytrade. What is the point of doing that?
If you trade Oil with a margin of 5000$ per contract, is your capital then 5000$ you invest? or do you calculate the total worth of the contract? It gives two total different outcomes, if you want to know what the return is in %

Also, if you daytrading method is limit on size (what always is) and time (what always is), then any return must exceed your expectation to make it worhtwhile in dollar terms and not in %
 
danielc1 said:
I do not think you need to think in percentage returns on capital if you are going to daytrade. What is the point of doing that?
If you trade Oil with a margin of 5000$ per contract, is your capital then 5000$ you invest? or do you calculate the total worth of the contract? It gives two total different outcomes, if you want to know what the return is in %

Also, if you daytrading method is limit on size (what always is) and time (what always is), then any return must exceed your expectation to make it worhtwhile in dollar terms and not in %
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I understand your comment. Return on a capital allocation might be an important metric to follow, but return on capital would be based on the account size necessary to run your strategy as most traders are not 100% all-in on each trade. And, when you scale, using 100% of your margin in a larger account on one symbol would cause very big swings, which typically does not end well.
 
guru said:
I’m also curious but doubt there is any solid, consistent or verifiable info. World trading champions seem to make a bit over 200%/year, and even then many people say that’s only because they use small account where they don’t mind taking excessive risks:
https://www.worldcupchampionships.com/standings

It also depends what they trade and whether they use leverage, how much risk they take, etc. Some traders do make 1000%+ with penny stocks because those can move 20%+ in a day. Options may also offer great potential. Everything else just requires lots of leverage and risk taking.
I don’t believe that 500% is a *realistic* or average for successful traders, maybe with some exceptions. Who is/was the last great day trader we’re hearing about? There are plenty of names in books from 20+ years ago when leverage and risk was the name of the game, but now you aren’t even allowed too much leverage. So what trader names come to your mind right now? Which traders became famous in the last 5-10 years and what’s their claim to fame (how much do they make?)
There are only plenty of articles posted here on ET about traders losing their jobs, losing money, closing shops, running Ponzi schemes, etc. Even many prop firms have disappeared, some converted to course-selling scams, while others are looking for proven day traders that they cannot find.
Just because there are a few anonymous guys somewhere making 500% per year shows how unsuccessful, minuscule and pitiful this whole industry has become. In the past we could look up to great traders and they were known and treated like sports champions. Right now you just hear about some anonymous dude somewhere, making a few bucks, and preparing to sell another trading course.
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I did hear a couple podcast on “Better System Trader” with Michael Cook, Kevin Davey and Larry’s Williams about competing for world trading champion. They all mentioned they don’t trade their real accounts like that. The competition forces you to lever up and go big or go home.
 
Trading is not like a job.
A job is something that different people do same amount of work and get same amount pay.
But trading is like a chess competition. The better player can do better and get better pay. So if you ask what is realistic pay for a chess player? It depend on your skill. The best chess player get significantly higher pay than average players. So is trading. The best trader make significantly higher return than average traders.
I know the best trader can do significantly better than 500% annually.
But for other traders 50% annually is a good job.
 
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Btw, recently there were couple mentions here of Fermi problem (https://en.m.wikipedia.org/wiki/Fermi_problem), and you may be able to use similar deduction process to estimate how much % successful day traders make.
Let’s say there are 10 million traders in the world (https://www.quora.com/How-many-stock-traders-are-there-worldwide) and 1% of them are “successful”, which gives you 100K successful traders.
If all of them made 500% on average (some less and some more) then in 10 years an average trader would be a $billionaire, so we’d have 100K famous trader billionaires running around.
But let’s say that 90% of them would take money out each year or month for living expenses, so we’d have only 10K famous trader billionaires running around.
But let’s say 90% of those 10K would say that their trading is not scalable so each year they start over with $100K. This leaves us with only 1k famous trader billionaires running around.
But the reality is that there are 0 (zero) famous trader billionaires running around, so the whole 500% is total bs.

So now we have to start over and figure out how exactly we’d define a successful trader? Let’s say that successful ones are those that turned $100K into $5M in 10 years, because that indeed would allow them to be at least defined as mildly successful.
And this indeed is 300%-500% per year WHEN you start over with $100K each year.
So now calculate the actual annual %return when turning $100K to $5M over 10 years and you’ve got your actual annual % for the few successful traders that may exist, at least by definition. And you can adjust the definition of a successful trader however you like (turning $X into $Y in Z years), and calculate the annual % based on that.
 
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guru said:
Btw, recently there were couple mentions here of Fermi problem (https://en.m.wikipedia.org/wiki/Fermi_problem), and you may be able to use similar deduction process to estimate how much % successful day traders make.
Let’s say there are 10 million traders in the world (https://www.quora.com/How-many-stock-traders-are-there-worldwide) and 1% of them are “successful”, which gives you 100K successful traders.
If all of them made 500% on average (some less and some more) then in 10 years an average trader would be a $billionaire, so we’d have 100K famous trader billionaires running around.
But let’s say that 90% of them would take money out each year or month for living expenses, so we’d have only 10K famous trader billionaires running around.
But let’s say 90% of those 10K would say that their trading is not scalable so each year they start over with $100K. This leaves us with only 1k famous trader billionaires running around.
But the reality is that there are 0 (zero) famous trader billionaires running around, so the whole 500% is total bs.

So now we have to start over and figure out how exactly we’d define a successful trader? Let’s say that successful ones are those that turned $100K into $5M in 10 years, because that indeed would allow them to be at least defined as mildly successful.
And this indeed is 400%-500% per year if you start over with $100K each year.
So now calculate the annual %return when turning $100K to $5M over 10 years and you’ve got your actual annual % for the few successful traders that may exist, at least by definition. And you can adjust the definition of a successful trader however you like (turning $X into $Y in Z years), and calculate the annual % based on that.
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1% make 500% annually? It should be significantly lower than 1%.
Maybe 1% of 1%.
 
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100% in a week is possible on a small account, not sure about consistently not managed that part yet, given 10years of hard graft and failure and losses, before finally accepting how easy to really is to make $$$'s trading.

Only 1 in 1000 of us will likely even get to the level of 500%+ per year mind.

Still better odds on winning the lottery.

Lottery used to be 14,900,000 : 1, 2 tickets per week = 104, 50 years = 5200 tickets or £10,400 cost odds 1:2865 of winning, trading better odds :)
 
expiated said:
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107% for the contest winner is reasonable, but even that was with small money. In the MMVR of years ago ($1MM to enter), I recall only 2, +100% years among all of the contestants... and for the most part they were pro investors or aspiring to be.

Claims, hopes, expectations of 500% annual returns (or even one year) with significant money is right up there with belief in unicorns.

For realistic expectations, listen to Morse. He knows.
 
bbpp said:
1% make 500% annually? It should be significantly lower than 1%.
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Well, we still don’t know of even one $billionaire day trader :)
While if significantly less than 1% are successful, then we may have a few hundred successful day traders? This would make the whole concept of a successful trader unrealistic and the “trading industry” non-existent, which actually it may be.
So we’d still have to go to the 2nd solution and create some definition of a success trader (define them as someone turning $X into $Y within Z years), then calculate the annual % return based on that definition.
 
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